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Tuesday, March 12, 2013

Public company evisceration

Pity the White Energy shareholders

SMH | Michael Pascoe | 11 Dec 2012
Put aside the fascination and entertainment of the ICAC's hearings into colourful and outrageous aspects of the former New South Wales government for a moment and spare a thought for the suffering White Energy shareholders. No, not the extremely rich insiders' club running the thing, but the mug punters who trusted them.

Duncan’s White Energy donated to Liberals 

AFR | Updated 11 Mar 2013
Updated | Coal mogul Travers Duncan’s public company White Energy donated $60,000 to the Liberal Party in late 2010 when Mr Duncan and his partners at Cascade Coal were negotiating a secret deal to buy out the family of Labor powerbroker Eddie Obeid from a coal exploration licence at Mount Penny in the Bylong Valley.
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Taped call has mogul in sticky spot

SMH | Kate McClymont | 7 Dec 2012
The 80-year-old mining magnate, Travers Duncan, one of the richest men in the country worth an estimated half a billion dollars, sat expressionless in the witness box at the Independent Commission Against Corruption as he listened to an intercepted phone call in which he was talking to his business associate John Kinghorn.

White Energy, which had as its directors several of the owners of Cascade Coal including Mr Duncan, was negotiating to buy Cascade Coal for $500 million.

Cascade's only asset was the licence it had bought from the NSW government for $1 million.
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Mining magnate tries to shut down ICAC inquiry

SMH | Kate McClymont | 8 Mar 2013
Millionaire mining magnate Travers Duncan has taken the extraordinary step of launching legal action aimed at shutting down the Independent Commission Against Corruption inquiry in which adverse evidence has been given about himself.
Mr Duncan was one of seven wealthy business figures whose company Cascade Coal is alleged to have won a rigged government coal tender...
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‘Whiff of corruption’ over coal deal

In mid-2010, Cascade was negotiating to sell its assets to a related company, White Energy, in a $500 million deal abandoned last April.

Five of the shareholders of Cascade Coal, including Mr McGuigan, a lawyer, and his business partner John Atkinson, Felix Resources founders Travers Duncan and Brian Flannery, and RAMS Home Loans founder John Kinghorn were also directors of White Energy.
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Pity the White Energy shareholders

SMH | Michael Pascoe | 11 Dec 2012
Like every "independent expert" report, the Deloitte job for White Energy on Cascade Coal found what those commissioning the report wanted it to find: the deal was "fair and reasonable".

More than that, the "independent expert" report made the $486 million price sound like a bargain: Deloitte priced Cascade in a range from $459 million to $587 million. White Energy chief executive Flannery highlighted that "bottom-of-the-range" pricing while releasing the report to the market with full fanfare on February 23.

On the other hand, Deloitte seemed not to notice what an anonymous engineer did about "capitalised mining costs of $41.8 million" that "relate to the carrying value of acquisition, rights and other mining costs relating to the Mount Penny and Glendon Brook mining sites".

The engineer reportedly couldn't see how Cascade could have spent so much and suggested to the ASX that it make further inquiries.

The detail of the Deloitte "independent expert" report shows the Cascade takeover could have sent White broke. Having paid Cascade's owners (mainly White directors, friends, associates and Obeids) a fortune
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